ECB Meeting Minutes, UK and Canada Retail Sales

The broad market sentiment overall reversed by Friday morning, with equities, precious metal and energy commodities down, while the US dollar started to recover lost ground. Despite these developments some emerging country currencies nonetheless continued to recover, such as the South African rand (ZAR) or the Russian rouble (RUB).
Japan’s central bank (BoJ) expanded its support to small and mid-size businesses to help the government efforts already in place by adding a volume of credit at 30 trillion JPY with commercial banks receiving the credit at 0.1 per cent interest rate. The USD/JPY pair traded lower over-night despite the otherwise strong sentiment for the greenback.
With tensions between the US and China again dominating the news and stock indices edging lower, the Volatility Index VIX remained almost unchanged over the course of this week. Such high levels in the VIX were last seen during a brief spike in 2011 in the aftermath of the global financial crisis and trade tensions with China in recent years since the election of Donald Trump only very briefly lifted the often called ‘fear index’ above 30.
After Bitcoin was again unable to push above the resistance level around $10,000 a further retracement set in with the biggest cryptocurrency by market capitalization trading at only around $9,000 by Friday morning.
On Friday retail sales data from the UK and Canada can be expected as well as the meeting minutes of the last monetary policy meeting of the Governing Council of the ECB at the end of April.

EUR/USD

Despite the comeback of the dollar, the EUR/USD pair managed to defend the support level around 1.09 by Friday morning.
US fundamentals released on Thursday showed a mixed picture with new jobless claims continuing to decline to 2.4 million after almost 3 million in the week before and existing home sales in April stabilizing at 4.3 million, which was better than expected most states had much stricter lockdown measures back then.
On Friday the European Central Bank (ECB) will publish its meeting minutes from its last meeting on the 30 April, where the central bank decided to extend its bond purchase program, catching up to the programs in place at other central banks, with the President of the ECB indicating that the programs could be extended even further.

Hong Kong 50

Especially in the Hong Kong market the adverse market sentiment due to the escalating tensions between the US and China could be observed, where the share index plunged by well over four per cent. Besides the United States preparing a new law that could severely restrict the listing of Chinese shares on US exchanges with the NASDAQ-listed Chinese search engine company Baidu now officially considering a delisting in the US, the proposed Chinese new security laws could significantly affect the business environment in the Special Administration Region of Hong Kong and Macau. As the US sees such laws as an undue interference in the independence of the city, which was granted autonomy rights for 50 years following the hand-over from the UK in 1997 and the United States passing a new law during the Trump Administration that requires the president to asses, whether Hong Kong should enjoy special privileges in the trade relations with the US, some speculate that these new developments could make the US decide not to extend those important rules for the city.

WTI Oil

Oil prices took a dive by Friday morning, possibly also due to the escalating tensions between the US and China. Still, on a weekly basis oil prices are set to close higher for the fourth week in a row. However it should be still clear how much the pandemic affected the oil industry with the number of operating oil rigs according to the US Baker Hughes Oil Rig Count that will be again published on this Friday last week reduced to just 258, which is a decline of well over fifty per cent compared to the pre-pandemic levels and oil prices still trading around half the price seen at the beginning of the year, the consequences of the wide-spread lockdowns by far have not yet been resolved.
On the positive note, some analysts are predicting that with the current production cuts, the global oil markets could experience a deficit in supply as soon as next month, while China have been grabbing the cheap oil off the market in recent weeks. While some countries could very likely reduce their consumption of oil, new Chinese data suggests that they might even increase imports by 1 to 2 per cent compared to the past year.

US 500

With the stock market indices again under pressure, more traditional indices like the US 500 might continue on their side-way move seen over the course of the past weeks, while the tech index US Tech 100 is on track to still close the week at a new post-corona high. The performance of the tech index is especially supported by the strong resilience of tech stock with some of the highest market capitalization like Apple and Microsoft. The FANG+ index, which includes these and eight other to tech stocks, was at its peak during this week only 0.7 per cent below the previous all-time high recorded in February.
Aurora Cannabis (+35.7%) continued to be one of the most volatile trades in the market, recovering from the retracement on Wednesday and gaining 117 per cent since market open on the previous Monday following the reverse stock split.

The materials contained on this document should not in any way be construed, either explicitly or implicitly, directly or indirectly, as investment advice, recommendation or suggestion of an investment strategy with respect to a financial instrument, in any manner whatsoever. Any indication of past performance or simulated past performance included in this document is not a reliable indicator of future results.
For the full disclaimer click here.

Emails that are sent by iFOREX contain important information regarding your trading account. Should you choose not receive emails from iFOREX, you accept and confirm that iFOREX will not be liable for any damage caused, and you will not have any complaint to iFOREX or its employees.
Do you wish to receive emails from iFOREX?

You requested to register with an iFOREX Group entity that does not service clients from your country. You will now be transferred to the website of , a company licensed and supervised by the , where you can continue the registration process.